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Three stocks have share prices of $20, $10, and $30 with total market values of $400 million, $350 million, and $150 million, respectively. If you were to construct a price-weighted index of the three stocks, what would be the index value?

Three stocks have share prices of $20, $10, and $30 with total market values of $400 million, $350 million, and $150 million, respectively. If you were to construct a price-weighted index of the three stocks, what would be the index value?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Three stocks have share prices of $20, $10, and $30 with total market values of $400 million, $350 million, and $150 million, respectively. If you were to construct a price-weighted index of the three stocks, what would be the index value? 15 30 45 20 (6 SEP 19 MacE
Transcribed Image Text:Three stocks have share prices of $20, $10, and $30 with total market values of $400 million, $350 million, and $150 million, respectively. If you were to construct a price-weighted index of the three stocks, what would be the index value? 15 30 45 20 (6 SEP 19 MacE
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Price weighted index is the average of prices of stocks. The price of stock has strong influence on the value of price weighted index.

 

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